Life Insurance Calculator

Use Human Life Value (HLV) method: Annual Income × Remaining Working Years (till 60) − Current Savings. Add liabilities (home loan, car loan, personal loan). Subtract existing life cover (employer insurance). Example: Age 30, income ₹10L/year, 30 years till retirement, ₹50L home loan, ₹20L savings → HLV = (₹10L × 30) − ₹20L = ₹280L. Total need = ₹280L + ₹50L loan = ₹330L. Employer cover ₹10L → Buy ₹3.2 crore term insurance. Rule of thumb: 15-20× annual income minimum.

Term Insurance: Pure protection, ₹1 crore cover = ₹12-15k/year, NO returns, BEST for most people. Traditional (Endowment): Insurance + Savings, ₹1 crore cover = ₹2-3L/year, returns 4-6% (below FD), AVOID. ULIP: Insurance + Market investment, high charges (5-7% annually), returns 8-10% (after charges), AVOID. Verdict: Buy ₹1 crore term insurance (₹15k) + invest remaining ₹2.85L in mutual funds (12-14% returns) = MUCH better. Never mix insurance with investment—insurance companies are terrible at wealth creation.

Section 80C: ₹1.5L deduction on premiums paid (term insurance + traditional). Tax saved: ₹46,500 at 30% bracket. CRITICAL: Premium should be less than 10% of sum assured OR policy purchased before 2012 it's 20% limit. Section 10(10D): Maturity/death proceeds 100% TAX-FREE (if premium less than 10% rule followed). Example: ₹1 crore term insurance, ₹12k premium → ₹12k deduction under 80C. Death claim ₹1 crore → TAX-FREE to family. ULIP maturity ₹50L → TAX-FREE (if premium less than ₹5L/year). However, Section 80C has combined ₹1.5L limit (PPF, ELSS, insurance together).

Online (Direct): 15-20% cheaper (no agent commission), instant policy, 24/7 purchase, BUT claim assistance depends on company helpline. Example: ₹1 crore HDFC Life Click2Protect = ₹12k online vs ₹14.5k via agent. Offline (Agent): Higher premium, personal claim support (agent helps family during claim), BUT agent may push high-commission traditional/ULIP plans. Recommendation: Buy TERM insurance ONLINE (simple product, price matters). Claim settlement depends on nominee's documents, not agent. Top online term players: HDFC Life, ICICI Prudential, Max Life (95-98% claim settlement ratio).

Buy NOW (age 25-30), even if single. Why? (1) Premiums locked: ₹1 crore cover at 25 = ₹10k/year till 60. Same at 35 = ₹15k/year (₹5k extra annually × 30 years = ₹1.5L saved). (2) Health uncertainties: Diabetes, BP develop at 30-40. Pre-existing = rejection or 50-100% loading. (3) Parents as dependents: If they depend on you, you NEED insurance. (4) Portability NOT allowed: Can't switch to cheaper policy later without medical tests. Start with ₹50L at 25, increase to ₹1 crore at 30, ₹2 crore at 35 as income grows. Cheaper than buying ₹2 crore straight at 35.

Essential Riders: (1) Critical Illness (₹3-5k extra): Pays 25-100% sum assured on cancer, heart attack, stroke diagnosis—use for treatment. (2) Accidental Death (₹1-2k extra): Additional sum assured if death by accident—high-risk jobs benefit. Optional: (3) Waiver of Premium (₹2k extra): Future premiums waived if you become disabled—NOT worth it for most. (4) Accidental Disability (₹2-3k extra): Lump sum on permanent disability. AVOID: (5) Hospital Cash, (6) Surgical Care (buy separate health insurance instead). Recommendation: Base ₹1 crore term + ₹50L critical illness rider = ₹16-18k total. Critical illness important—50% cancer patients deplete savings within 1 year.

YES, you can hold and claim MULTIPLE term insurance policies simultaneously. Each policy pays full sum assured independently. Example: ₹1 crore from HDFC + ₹1 crore from ICICI = ₹2 crore total death benefit to family. NO limit on number of policies. WHY multiple policies? (1) Diversification: If one company delays claim, other pays. (2) Gradual increase: Buy ₹50L at 25, add ₹50L at 30, add ₹1 crore at 35 = ₹2 crore total. (3) Company risk: What if insurer goes bankrupt? (rare but possible). Disclose ALL existing policies when buying new—hiding = fraud = claim rejection.

Term Insurance: Policy LAPSES immediately. NO maturity value, NO death benefit, ALL premiums LOST. Revival allowed within 2-5 years with back premiums + interest + medical tests. After revival period, policy DEAD permanently. Traditional/ULIP: Policy becomes 'paid-up'—continues with reduced sum assured (proportional to premiums paid). Example: ₹10L policy, paid 5 years of 20 = 25% paid → Sum assured reduces to ₹2.5L. Maturity value continues (fund value in ULIP, guaranteed corpus in traditional). CRITICAL: NEVER let term insurance lapse—set auto-debit, keep emergency fund for premiums. ₹12k/year = ₹1k/month buffer.

Top rejection reasons (5-10% claims rejected): (1) Non-disclosure: Hiding pre-existing disease (diabetes, BP), smoking, hazardous job during application—#1 reason for rejection. (2) Suicide within 1 year of policy (some companies 2 years). (3) Death due to excluded causes: War, nuclear disaster, self-injury, criminal activity. (4) Lapsed policy (unpaid premium). (5) Document issues: Wrong nominee details, missing death certificate, police report (for accidental death). HOW TO AVOID: (1) Disclose EVERYTHING truthfully—medical history, habits, occupation. (2) Keep policy active (auto-pay). (3) Inform nominee about policy—70% policies unclaimed because family doesn't know. (4) Update nominee after life events (marriage, divorce, kids).